As we enter the new year, maritime trade and the supply chain are expected to see a continuation of the significant global economic headwinds experienced in 2023. Imports from Asia, particularly China, declined at major US ports in 2023. Below average volumes are expected to continue in 2024. And recession fears persist as concerns mount about a decrease in consumer spending.
Despite this economic uncertainty, we see rays of sunshine coming through the clouds at West Coast ports. This is due to the successful conclusion of contract negotiations in June between Pacific Maritime Association and the International Longshore and Warehouse Union that resulted in a new six-year agreement that runs through June of 2028.
The protracted talks adversely impacted West Coast ports by prompting shippers to increasingly divert cargo to rival ports on the Gulf and East Coasts. Since both parties ratified the contract — concluding with a White House ceremony hosted by President Biden — container volumes rebounded in the second half of 2023 after a year of declines. With the labor stability provided by the new agreement, we expect to win back even more cargo in the year ahead.
The new coastwide contract preserves port workers’ world-class pay and benefits and enables terminal operators to keep investing in technologies to boost productivity, efficiency and, thus, throughput, an imperative for West Coast ports to overcome competitive challenges and maintain their vitality as trade gateways and economic engines.
We’re keeping a close eye on the global economic challenges that cascade from the docks throughout the US economy. But we’re confident in the ability of West Coast ports to address these challenges.
From renewed labor stability and efficient terminals to environmental stewardship and increased coordination with supply chain partners, West Coast ports have the resiliency to confront these challenges and help the shipping industry restore its equilibrium.